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Tax Code Overhaul Could Raise GA Cigarette Tax

The Special Council on Tax Reform is recommending increasing the levy from 37 cents to 68 cents.

March 20, 2011, 08:00 pm

ATLANTA -- Georgia legislators are reviewing a proposal that would increase the state's cigarette tax from 37 cents to 68 cents per pack. The change would move Georgia's cigarette tax from the lowest in the Southeast to among the highest.

According to the Gainesville Times, the Special Council on Tax Reform recommended the increased levy as part of its efforts to overhaul the state's antiquated tax code. The nearly double jump would bring in an estimated $114 million in tax revenue.

Georgia's cigarette tax has held steady at 37 cents per pack since 2003 when lawmakers raised it from 12 cents. And the proposed increase is drawing response from retailers and anti-smoking advocates alike.

"Business will definitely go down," Ahmed Tharani, manager of the Shell convenience store in West Ridge Road, told the newspaper. "We're already struggling with the economy, and we don’t have any support."

However, some think the increase is not high enough. According to the Gainesville Times, anti-smoking groups would prefer to see the levy hiked up $1, which would generate more than $350 million for the state's coffers.

"About 98 percent of smokers start between 13-18 and one way to deter our kids from even picking up the habit is to increase the price of the product," said Eric Bailey, Georgia's advocacy manager for the American Cancer Society. "For Georgia's tax to be so low is unacceptable, especially if we are really serious about trying to reduce smoking rates and reduce health costs."

Roger Tutterow, an economics professor at Mercer University and a member of the Special Council on Tax Reform, told the newspaper that the proposed increase should not be seen as a statement on smoking. "A lot of times you hear the moniker of the sin tax and this is not a moral judgment on consumption," he said. "This change would move the cigarette tax in parity with the average rate of surrounding states. There are a variety of public policy arguments, but at the end of the day our recommendation is based on parity."